Budgeted output for DuCane Small Engines Inc.was 20,000 engines during February 2016.Budgeted fixed overhead per output unit was $2.50,and 30,000 engines were actually produced.Actual fixed overhead was allocated at $3.00 per engine.What is the production-volume variance?

Question

Quizplus · Accepted Answer

The production-volume variance is calculated as (Actual production - Budgeted production) x Budgeted fixed overhead rate per unit. Here, (30,000 - 20,000) x $2.50 = $25,000 favourable.

Budgeted Output for DuCane Small Engines Inc